Google to change product search to paid Google Shopping system

Yesterday Google announced it will change its Product Search to a new Google Shopping system, which will require merchants to pay for inclusion.

Since its launch as Froogle, later named Merchant Center, ecommerce sites could see their products included in Google’s Product Search for free. As the database of products and sellers fueled Google’s universal shopping results, this proved to be a very effective way to gain traffic and conversions from Google’s search engine users.

Now that it is transitioning to a paid inclusion system, Google will migrate existing merchant feeds to the new paid system, which will be rolled up in to AdWords. To incentivise the transfer, Google offers the following:

All merchants who create Product Listing Ads by August 15, 2012 will automatically receive a monthly credit for 10% of their total Product Listing Ad spend through the end of 2012; and

Existing Google Product Search merchants can receive $100 AdWords credit toward Product Listing Ads if they fill out a form before August 15, 2012

Simultaneously with this announcement, Google is also rolling out a new format to display products in its search results, now marking them as sponsored:

An example of Google's new product listings in its SERPs

As usual Google is wrapping this commercialisation of a previously free service in their usual phrasings of ‘enhanced user experience’:

“We believe that having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date. Higher quality data—whether it’s accurate prices, the latest offers or product availability—should mean better shopping results for users, which in turn should create higher quality traffic for merchants.”

Despite this corporate speak, it is hard to see this change as a good thing. First of all it’s not beneficial for ecommerce sites. Where previously small sites could compete with bigger merchants in Google’s shopping results by virtue of having relevant products and good customer service (with the latter translating in to positive seller reviews which helped boost a merchant’s product visibility), this new fully commercialised Google Shopping system favours big merchants with large advertising budgets.

Additionally it’s not good for consumers either. A commercialised Google Shopping system will decrease the amount of merchants that are able to be shown in shopping results, and that will result in less choice for consumers that use Google to find products. Also, the extra cost that merchants will incur as a result of paid inclusion will eventually be paid by customers, either through higher prices or through a reduction in peripheral services that a merchant offers.

It’s hard to interpret this as anything else than a cynical profit-maximisation move by Google. Which is, of course, the company’s right as a for-profit organisation. It just seems rather hard to consolidate with their founding principles, and flies in the face of statements made by Google’s founders in previous years in which they denounce paid inclusion.

I suppose this is a symptom of the new Google we find ourselves dealing with these days: more ruthless and profit-focused, and less tolerant of rogue elements in its SERPs – especially unpaid elements.

Great post Barry and I totally agree, I think that this change is going to push more sales towards the big merchants that have the money to spend on paid advertising. Smaller companies will no longer be able to compete and I would imagine that a lot of them would have made a good chunk of revenue from this source in the past.

Also, these listings appearing at the top of the results detracts once again from the natural listings. It says in their announcement that the product listing ads will only be taking up the same real estate as the PPC ads but looking at the screenshots, this looks like it will take up much more.

So I think it is time to push for another solution than Google. We have allowed them to gobble up Yahoo and we thought that yahoo shopping was a bad thing. At least we knew from the start that Yahoo charged.
It is time to change, big time! I am pulling all of my analytics accounts and my email from Google. I am searching for something else and I am pushing every client I have out of the Google world. I don’t think it is bad for a company to make money. I think it is bad to not “practice what you preach” and that is what Google has done here.

hmm. big business will benefit, in my view small business wont as costly, more work to manage ads etc.
I think its another win for the big boys and I think us smaller businesses will pay for it
Kind Regards
fromhttp://www.carmatsd2u.co.uk

State of Digital Events

Search other topics

Our Archives

What is State of Digital?

In a fast-changing digital environment, it is hard to keep up. Knowing what are the strategies and tactics you need to deploy to become better at your marketing is not an easy task.

State of Digital aims to help (digital) marketers from every level. Help them find their way in this changing environment. By sharing the latest strategies and tactics. By offering training. Using industry experts, State of Digital tries to help you become a better marketer.